The oil prices ended sharply low this Tuesday, at the lowest in four months, in a market worried about a possible recession due to interest rate adjustments, which created turbulence in the United States banking industry.
The price of the barrel of north sea brent for delivery in May thus lost 4.11% to close at 77.45 dollars in London, while the barrel of West Texas Intermediate (WTI) for April lost 4.63% to $71.33 in New York.
“This banking crisis reinforces fears of a recession,” said John Kilduff of Again Capital, referring to the failure of three US banks since last Wednesday.
Despite Wall Street stabilized on Tuesday after the initial shock of bankruptcies, and the urgent measures adopted by the US authorities to guarantee bank deposits, “this affects investor confidence” in the financial system and “in the economy in general”.
“It doesn’t bode well for oil demand,” the analyst emphasized.
“Excluding gold, it’s the entire commodity sector that seems to think we’re headed for a recession,” said Bill O’Grady of Confluence Investment.
“Most of the traditional indicators announce it,” insisted the analyst, who mentioned in particular the evolution of Treasury bond rates, higher in the short term than in the long term for months, a phenomenon that almost systematically predicts a recession.
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